What is a grace period on a credit card?

A grace period on a credit card is a period of time when the cardholder is not required to make payments. In Delaware, the grace period must be at least 21 days long and must allow the cardholder to avoid interest charges if the account balance is paid in full before the end of the grace period. The grace period begins the day after the credit card statement is issued. Cardholders can take advantage of the grace period to make purchases and avoid interest charges, as long as the account balance is paid in full before the end of the grace period. Grace periods do not apply to cash advances, balance transfers, and other types of transactions made with the credit card. Interest charges for these types of transactions begin to accrue immediately. If cardholders believe they will be unable to pay the account balance in full before the end of the grace period, they should try to make as large of a payment as possible on the balance to minimize the amount of interest charges they will incur. In Delaware, it is important for cardholders to understand the laws governing credit card grace periods so they can best use them to their advantage. By understanding the grace period and using it to pay off their account balance in full, they can avoid costly interest charges on a regular basis.

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